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Committee hears bill clarifying manufacturing distillery rules as some producers approach statutory cap
Summary
House Bill 1466 would clarify the legal status and permitted operations of distilleries that exceed the current 25,000-gallon threshold and addresses satellite locations and off-premises sampling; supporters say the change will preserve jobs and growth for in-state distillers, while wholesalers urged safeguards.
The House Industry, Business and Labor Committee heard testimony on House Bill 1466, which the sponsor said is intended to clarify the law for manufacturing distilleries, satellite locations and what happens when a local distillery reaches the statutory 25,000-gallon cap.
Sponsor Jason Doctor told the committee the bill’s purpose is “to clearly define a manufacturing distillery, and ensure such distilleries the ability to continue operations which also remain compliant with North Dakota state laws.” Supporters said the change is a narrow technical fix, not a change to the state’s distribution regime.
Shiloh Perry of Big Dog Beverages testified that her Bismarck distillery is approaching the 25,000-gallon limit and that current Century Code lacks language defining what happens after a distillery hits that cap. She said the absence of a clear statutory pathway risks jobs and investment in the state. “Without the amendments that 1466 outlines, we will have to take all of those jobs outside of the state,” Perry told the committee.
Witnesses including industry representatives argued the proposal would not alter the wholesale distribution system but would clarify the on- and off-premises activities that manufacturing distilleries may undertake after they exceed the current threshold. Scott Byerly, testifying for producers, urged lawmakers to be mindful of national distribution dynamics and said the bill’s change is meant only to define post-cap activities.
Opponents included the North Dakota Wine and Liquor Wholesalers Association. Association representative John Ward said wholesalers generally do not oppose clarifying language but cautioned against removing production caps altogether. He suggested raising the cap (he referenced a working figure of 40,000 gallons suggested in committee discussion) rather than eliminating limits, and warned of possible dormant commerce-clause issues if an in-state preference results.
Committee discussion focused on sticking points: whether the change would permit greater self-distribution or alter wholesalers’ role; whether off-premises event sampling and sales create enforcement or tax-collection issues; and whether the bill should raise the gallon threshold instead of leaving it open-ended. Representatives asked for concrete data on projected production volumes and on how distribution and tax reporting would be handled.
No committee vote was recorded during the hearing. Committee members asked for clarifying amendments and data from the tax department and stakeholders before taking further action.
